The so-called recovery is only built on debt and printed cash declares our own Byron King. In the long term, the only option for the government to continue financing it's operations is to print too many dollars. Money printing has it's limits, however. It's Byron's opinion that at some point, perhaps very soon, the government will have to turn to more desperate measures. Namely, capital controls. In the following featured essay, Byron outlines 4 probably ways the government will take your cash and one play you can buy through your broker to prepare today. Read on...
Americans expatriate because they want to get out of the country. Corporations expatriate for similar reasons. Clem Chambers explains...
Say goodbye to your boring morning commute. New technologies are changing the way people drive their cars. It’s making them safer, more fuel efficient, and could reshape the way America builds its roads and cities. The only thing that could stand in the way...
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]
The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in […]
When the NSA surveillance news broke last year it sent shockwaves through CERN, the particle physics laboratory in Switzerland. Andy Yen, a PhD student, took to the Young at CERN Facebook group with a simple message: “I am very concerned about the privacy issue, and I was wondering what I could do about it.”There was […]
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance or the get-rich-quick adventurer. They will die poor.– Jesse Livermore, How to Trade in StocksThe trouble with capitalism’s guardians is that they have no […]
Let’s head back in time…In 2004, a mere decade ago, the US national debt rang the register at $7.4 trillion. That represents “debt per citizen” of over $25,000. You, me, your neighbor, your 4-yr old grandson, you name it and they’re portion of the U.S. debt is $25k.But flash forward to today and you’ll see […]
John Foust, a Democrat running for the 10th congressional seat in Northern Virginia, is — like Gov. Terry McAuliffe and other state Democrats — gung-ho to expand Medicaid. His wife’s position is, shall we say, a bit more nuanced.Foust has slammed his opponent, Republican Del. Barbara Comstock, for her opposition to expansion. He has spoken […]
The midterm election season is upon us, and it’s a tossup whether the Republicans will win the Senate, or if President Obama, seemingly oblivious as conflict flares up around the world, will, through his continuous campaigning, keep Harry Reid in his majority leader seat.The only thing we know for sure is that sociopaths will be […]
Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke from its financially costly victory over the British Empire in the Revolutionary War.The states had accumulated relatively massive debts to finance that war, which mostly […]
I was talking with one of my colleagues the other day, and he raised a very interesting question, one that deserves consideration by anyone worried about their digital privacy. He read an article that championed the idea that the more steps one took to protect their privacy by using anonymous Web-browsing tools like Tor, the […]
In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets […]
When you type a website address into a browser, you might have noticed that the letters “http” appear at the front. “HTTP” stands for Hypertext Transfer Protocol. In typing a Web address, you are actually sending an HTTP command to transmit that website to you. Hypertext Transfer Protocol is the means by which information is […]
Some people are saying it is just what the doctor ordered. Others are saying that the cure is worse than the disease.The Affordable Care Act? Reengagement in Iraq? Tea Party bullying in the GOP?Not this time. Just as protracted in the corridors of Congress and the White House is the debate over the proposed reform […]
In 2012, money mandarins running the European Union chose stagnation over restructuring. Here’s a consequence of that choice: expectations for a self-sustaining economic recovery keep getting crushed.Two years ago, European Central Bank (ECB) chief Mario Draghi promised to do “whatever it takes” to hold the eurozone together. He bluffed nervous investors into believing in a […]
Picture the scene. It’s 2020. You’re at the checkout in a convenience store with a carton of milk. But you’ve got no cash and you’ve left your cards at home. No problem. You scan your right index finger; the green light flashes. Purchase approved and you leave. Easy.Is this a realistic vision of the future, […]
“In the beginning, all the world was America.” — John Locke“The Garden of Eden was a perfect place,” my friend Manuel explained. “Man had free will. He could live in harmony with nature and God — and everything would be fine. But if he defied God, the stain of original sin would be on his […]
After a week of reckoning about the American oil and gas boom… I’ve got to get something off my chest.I can’t stand it when a coworker takes credit for something I did.Whether it’s a special report I wrote or just a little investing trick I found on my own — if someone takes it and […]
It might sound like the latest new product from Apple, but IPAB is actually the newest major legal challenge to Obamacare.Recently, a three-judge panel in the 9th Circuit Court of Appeals in San Francisco heard arguments about the Independent Payment Advisory Board, or IPAB, a 15-member panel created by the Affordable Care Act and empowered […]
Americans have come to believe that the IRS and the income tax are inevitable parts of our lives. After all, most everyone alive today has lived his entire life under federal income taxation.It wasn’t always that way. For some 125 years, the American people lived without having any tax imposed upon their income.The obvious question […]
Here’s a fun fact: Although we all hate the U.S. dollar, as it continues to hemorrhage wealth, its foothold as the world’s reserve currency isn’t going to disappear overnight.A Russian gas deal with China won’t change that — as we’ll highlight below.But before we get to the nitty-gritty, let’s dive into a story that’s right […]
Franklin Delano Roosevelt famously used the term “forgotten man” in a 1932 speech to describe those at the bottom of the economic pyramid who, he felt, government should aid.But the originator of the phrase “forgotten man” had a whole different meaning in mind. He aimed to expose the seeming good intentions of government to reveal […]
“As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding […]
The Keynesian disaster recovery plan has been to lower rates, force people to take more risk in search of yield, and entice others to borrow and spend and, magically, more jobs will be created. If people won’t buy stocks, central banks will.Back in 2011, Ben Bernanke, when asked if QE2 was driving up stock prices, […]
In September 2009, when President Obama made a primetime speech pitching his not-yet-passed health care overhaul, he made the following promise: “I will not sign a plan that adds one dime to our deficits — either now or in the future. Period.” To prove his seriousness, he further promised that “there will be a provision […]
Whatever your views on the role of government, one thing is clear: There will be no way to pay for it if the economy doesn’t grow. And I’m not talking by a measly percentage point or two. If we can’t find our way back to 5% annual economic growth or above soon, America’s accumulated federal […]
In all likelihood, Republican efforts to defund Obamacare are toast — and sooner rather than later. It appears to be a fantasy that a bill to defund would even make it to president Obama’s desk.
This straightforward reality has prompted many reasonable observers to ask why frustrated conservatives would bother risking a government shutdown over the affair. Suck it up and move on, they say — even if Obamacare is stupid or bad.
And they are being reasonable, but they’re also wrong.
Many people are beyond frustrated with Republicans right now. They just don’t get it. It seems to be inadequate for today’s Republicans simply to do the intransigent, useless thing. They have to do the thing that also “holds us hostage,” putting the whole government and its functions on the line in order to gratify their sense of ideological correctness. WHY??? Because they’re jerks, comes the answer. They’re mean people.
That’s a judgment that would make a lot more sense were it not the case that, every day, on a myriad of issues right and left, it’s the government that’s holding us hostage — hostage to one-time votes made in Congress for the usual farrago of not-so-idealistic reasons.
Here’s how it works: a bill comes up for a vote. Round after frenetic round of lobbying and whipping has pretty much guaranteed the outcome. The bill passes, but more importantly the funding for the bill passes, and no matter how much of a dog the law turns out to be, it stays funded.
Once one chunk of the budget is on the table, every chunk of the budget there’s a constituency to alter is on the table, conceptually speaking. Defunding anything occurs to us as a slippery slope — a slippery cliff. If you defund this, what’s to stop future crazy Members from trying to defund anything they don’t like?
What indeed? How else are bad laws to be disposed of? Repeal? Debates around repeal are the same debates: repealing a law that is a budget item is defunding it (and then taking its penniless body out back and hitting it with the shovel).
Our fear of a Congress consumed by efforts to defund disliked laws has inspired us to think that nothing should be defunded. In fact, we are so convinced that everything should be funded that we fear the only way to make good on our conviction is to always fund more than everything, a.k.a. increase the debt ceiling.
This is how, in our minds, the only way to make a law mortal becomes a mortal threat to democracy. But isn’t it a greater threat to democracy to insist that no law, once passed, can ever go off the books and out of the budget? Isn’t the ultimate threat to democracy an enforced vow that once one hapless collection of Members or another votes to spend money on something important, we have to pay for it forever?
Of course, sometimes a new Congress does come in and tweak things around. Sometimes a program here or there gets sliced or dropped. But that’s a poor reflection of what’s at stake when it comes to the federal budget and American democracy.
What matters is that sometimes realignments of power that reflect voters’ minds and real-world change inspire Members of Congress to oppose a (big) budgeted piece of legislation. And because of our paralyzing fear of “dysfunctional government” (I’ve got news for you, it’s already here), Washington is set up so that any effort to defund a significant piece of legislation will provoke a “shutdown showdown.”
And guess what: We actually have been to this rodeo before. Seventeen times! Sometimes over matters considerably more limited in their scope and heft than Obamacare. That’s why Michele Bachmann is saying stuff like this to Byron York:
This isn’t just another bill. This isn’t load limits on turnip trucks that we’re talking about. This is consequential. And I think the reason why you’ve come to this flash point is that this is an extremely consequential bill that will impact every American, and that’s why you have such passionate opinions.
Analogies are always risky, but: this is tantamount to a move to defund the war in Iraq. Either you think the budgeted legislation is horrible or you don’t. And if you think it is horrible (like, a truly inexcusable mistake with real, rotten, and lasting bad consequences) then you’re in dereliction of your political duties not to try to take the money away. And if the reason you’re given for why the money has to stay — why the legislation is immutable — is that we can’t risk a government shutdown, well, who’s the real hostage? Especially when — the ultimate howler — you’re simultaneously told that your efforts are even more ridiculous because there’s no way they could ever actually work?
This line of intimidation and guilt-tripping knows no party. It works like a charm when demonizing and discrediting any group of legislators who want to un-chisel a once-passed bill out of budgetary stone. But is the “mature, responsible” position to treat a piece of legislation like a prison you build around yourself and fund forever, even after your death?
Elected representatives from both parties ought to break the shackles of fear-soaked propriety more often. So what if, most of the time, their push to defund will be dead on arrival? Establishment types will realize that shutdowns aren’t the horror shows they dread. And Members of Congress will begin to understand that slavish devotion to party and budget orthodoxy serves neither their conscience nor their constituents.
The best way to shake up our calcified government and two-party system is for individual Members to band together ad hoc — or alone, if need be — to try applying the power of the purse to legislation they truly, madly, and deeply cannot abide.
And yes: if our reps can’t tell the difference between budgetary resistance born of expediency and scheming instead of a sense of prudence and principle, there’s a strong pro-democracy case for throwing them out of office at the first available chance.
– James Poulos
Article originally appeared here.